On November 30, 2009, North Korea announced a reform to replace all currency in circulation with new bills and coins. North Korean officials have made no bones about their motivations: The “reform” constitutes a direct attack on the emerging market economy and the independence from state control that it represents. In an interview following the conversion, an official of the North Korean central bank noted that the reform was aimed at curbing private trade and underlined that North Korea is “not moving toward a free market economy but will further strengthen the principle and order of socialist economic management.”

Without doubt the currency reform will reduce the well-being of the North Korean population at a time when the country is already struggling with economic stagnation, spiraling prices, and a return of chronic food shortages. The open questions are two: Will the government ultimately be forced to adjust its strategy or will it persist in enforcing the new antimarket course of action? The New Year’s joint editorial of prominent official news organs, an important statement of the government’s policy intentions, conveys a mixed message consisting largely of blather about revolutionary upswing; it does not even mention the currency reform—potentially signaling a lack of resolve in carrying it out. The second question is whether the discontent this new government action has sown will have implications for the country’s political stability. Preliminary signs suggest the regime is leaving nothing to chance and that heightened repression is a central feature of the new economic controls.